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TransCanada PipeLines undaunted by prospect of U.S. pipeline subsidies Company president tells Canadian, Yukon Territories that with simultaneous construction, Mackenzie Delta pipeline will ship before Alaska line Gary Park PNA Canadian Correspondent
The head of Canada’s largest pipeline company views the prospect of U.S. government subsidies for an Alaska Highway gas delivery system as necessary to get Arctic gas to market.
In a series of late August meetings with the Canadian and Yukon governments, Hal Kvisle, president and chief executive officer of TransCanada PipeLines Ltd., argued subsidies are nothing new for large-scale projects.
“No mega-project, no major energy infrastructure project ever goes ahead without significant support and involvement from the government,” he said.
He said gas producers want subsidies to have some form of guarantee covering the returns they’ll make for gas that flows through the pipelines.
Kvisle held meetings in Quebec with Canada’s Natural Resources Minister Herb Dhaliwal and in Whitehorse with Yukon Premier Pat Duncan and Energy Minister Scott Kent.
Dhaliwal has been the Canadian government’s most outspoken opponent of any form of U.S. government financial backing for an Alaska Highway pipeline, threatening to slow down the approval process for the route through Canada.
He has said the market should decide the timing and location of a pipeline.
Kvisle also told the government leaders that if construction proceeds simultaneously on pipelines out of the North Slope and Mackenzie Delta he believes the Mackenzie Valley system will be the first to start shipments.
He said TransCanada’s most optimistic projections has a Mackenzie Valley pipeline coming on stream in 2007 or 2008, with the highway project unlikely to start operations before 2009 or 2010.
Company supports both lines TransCanada is active in both ventures, as co-owner with Duke Energy Corp. in Foothills Pipe Lines Ltd., which has been the driving force behind the highway project for 25 years, while seeking a major stake in the Mackenzie Valley proposal.
Kvisle said the timing depends heavily on “just how tight supply and demand for natural gas gets in the United States. Canada doesn’t need the gas.”
Duncan, who has consistently advocated two pipelines from the Arctic while pressing for the highway system to proceed first, said the prospect of the two systems being built at the same time did not concern her.
Following the meeting, Kent said he and Duncan continue to be puzzled by the level of Canadian opposition to “incentives in the (U.S.) Senate energy bill.
“For the jobs and opportunities that will flow to Canadians and northerners and Americans, we can’t figure out why the Canadian government is so opposed to these incentives, when clearly the industry has said there is room for two pipelines in the market,” he told the Whitehorse Daily Star.
Kvisle said there is no reason to believe that U.S. support for the Alaska Highway project should imperil the Mackenzie Valley project. “That’s not the case in our view,” he said.
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